this stout glennbeck.com/israel to find out how you can get involved. thank you for making this program possible. good night, america. >> bret: the power play over planned parenthood funding pits the federal government against one state. more grim economic news as president obama huddles with house democrats. and mitt romney declares his cappecandidacy for president ina state loaded with competition. i'm bret baier. this is "special report." indiana could become ground zero for a nasty fight between federal government and state officials over public funding for planned parenthood and other groups that provide abortions. the hoosier state threw down the gauntlet last month by choking off the money. washington responded with a slap of its own. correspondent molly henneberg tells us what is at stake. >> reporter: medicaid

administrator berwick suggests a warning to the state of indiana should be enough. >> we expect indiana will comply with the federal law. that is our position now. this will you wealth hold federal medicaid dollars? >> i'm in the going to speculate. i think they will comply with the law. >> reporter: indiana state senator schneider says the state should not back down. >> indiana has spoken. the people of indiana have spoken. i think we should challenge this. >> schneider sponsored the legislation that has obama administration bearing down on hoosier state. at issue, new law passed by the state legislature and signed by republican governor mitch daniels in may that prevents any state agency, including the state medicaid agency from entering into a contract with or making a grant two planned parenthood or any healthcare facility which performs abortions. except for hospitals and certain surgical centers. but berwick says this state law goes against federal medicaid law and illegal bans money from qualified healthcare providers. he sent a letter to the state saying he is "unable to approve changes to the state's

medicaid plan." >> the saw says if they want to give care, the willing provider we can't pay for abortion services but they have to be able to provide care in the state under medicaid. >> reporter: indiana republicans contend funding given to a clinic which provides abortions can in the be separated to ensure taxpayer dollars are not spent for those procedures. a spokesman for indiana attorney general says, "we are reviewing the letter but we will continue to defend the statute." the white house says cmf, the center for medicare and medicaid services denied 19 medicaid amendments from other states over the past year-and-a-half. because they violated the law. >> cmf did not impose penalties in any of the matters because the state worked to come in compliance. >> reporter: schneider contend indiana is on solid legal footing. >> we as the state of indiana have the right to identify and decide who amongst all of the service provider providers in oe receives that money. >> indiana receives more than

$4 billion a year in federal medicaid funds that could be stripped if the administration decides to play hardball. also, planned parenthood will be in court on monday asking a judge to stop the new law. bret? >> bret: molly, thank you. the president brought in democrats this afternoon to talk about the debt one day after hosting republicans. as was the case wednesday, the president is dealing with more unpleasant economic news. white house correspondent mike emanuel has the story. >> reporter: house democrats boarded buss to ride to the white house to meet privately with president obama as the republicans are challenging them to reveal a plan on dealing with the debt issue. after a 90-metropolitan meeting, democratic leader nancy pelosi called it productive. >> we are not going to default. we are going to use this opportunity to take us on a path of deficit reduction. >> reporter: house republicans made their case yesterday at the white house which speaker boehner reiterated today. >> decreasing the debt limit without spending cut and

reform would send a message to the job creators we're just not serious about stopping the spending addiction going on in washington. >> ahead of tomorrow government monthly jobs report, the private adp survey says the economy did not meet job creation expectations in may. it has been a bumpy week on wall street which left the speaker with a sense of urgency. >> it's pretty clear to us if we don't act soon and get the fiscal house in order the markets will act for us. >> already, moody's investor service determined the heightened polarization in washington increased the odds of a short-term default and may downgrade the u.s. triple-a rating. "failure to reach an agreement as part of the current negotiations would increase the likelihood of a negative outlook in the near tum because the upward debt trajectory would still in b in place." administration officials says it underscores the need for congress do move quickly. on the economic numbers, the white house is trying to focus on the big picture. >> longer term trends are positive. >> on criticism, mr. obama needs to be directly engaged

with solving the debt problems. the white house pushes back saying joe biden's bipartisan talk with member of congress made solid progress and he is the president's point man. >> everyone knows what the president's position is, what his plan is. parameters of his plan. it's quite clear. democrats are aware of it, republicans are aware of it. >> majority leader eric cantor says the president admitted the political reality to house republicans wednesday. >> he did say that nothing that he would propose could pass in the house. again, that was really i think indicative of where the president has missed the boat in terms of trying to lead. >> reporter: on fighting the debt deal, white house and democrats continue emphasizing the vice president-led talks but late today, congressman chris van hollen one of the negotiators admitted they have not gotten the "nuclear issues." >> bret: mike emanuel on the north lawn. slow and steady drop in price of gasoline stopped overnight. gas gained almost a penny. the national average is just

under $3.78. mortgage rate hit another low for the year. the new 30-year fixed rate is 4.55%. down from 4.6. factory orders fell 1.2% in april. retailers reported only modest revenue increases in may. stocks today were mixed. dow lost 41-1/2. nasdaq gained four. let's get more on the economy and the markets from fox business network correspondent peter barnes. it's been volatile. >> that's right. everyone is holding their breath now for the big jobs report tomorrow. and based on other economic reports that we got this week, it may not be very good. maybe 100,000 or so new jobs created last month. today, the labor department reported that 422,000 people filed for initial jobless claims last week. that's still an elevated level that points to weak job

creation. other indicators suggest economic growth is slowing. economists blame it on higher oil prices, tornadoes and other bad weather. even the earthquake in japan. the earthquake cut off supplies for key auto parts for japanese cars, which hurt u.s. auto supplies and sales. but one economists says the earthquake's impact should be temporary and that overall economic growth should rebound. >> this month of declines and other production is going to affect the gdp for the second quarter. not going to affect it for the third and fourth quarter just as much. but, you know, the damage has been done already so the second quarter will be weak because of that. >> now, if the economy is hitting a soft patch here, can washington really do anything about it? well, the federal reserve can't do much more to lower interest rates and the white house and congress are in a cutting mode, not in a more spending more stimulus mode so it looks like grind it out economic growth from here for

a while. bret? >> bret: peter, goldman satchgoldman wassubpoenaed by tn attorney general. >> goldman received broad subpoena from information from the manhattan district attorney. the subpoena covers controversial mortgage investment practices by goldman. these were detailed in an investigation by a senate committee here earlier this year. goldman declined to comment. but says it cooperates fully with subpoenas it receives. >> bret: we'll follow that one. peter, thank you. president obama is getting a new lawyer. kathy rumler will be white house council a counsel at the v month. she was chief executive to bauer who will serve as the personal attorney and general council to hicounsel to his re-n campaign. mitt romney today made it official. official what have been

obviously on the books for almost four years. he is taking another shot at the presidency. the former massachusetts governor made his announcement up the road in new hampshire. chief political correspondent carl cameron reports romney has plenty of company in the race and in the granite state. >> i'm mitt romney. nibble america. i'm run for president o runningf the united states. >> surrounded by who's who of new hampshire republicans, mitt romney launched his second bid for the white house in the state of the first primary. >> barack obama has failed america. >> reporter: with his failed 2008 run, the self-made multimillionaire businessman emphasizes his economic experience. >> from my first day in office, my number one job will be to see that america once again is number one in job creation. >> he leads most polls but his record as former governor of massachusetts troubles some conservatives for his past support of abortion rights and for signing massachusetts

healthcare reform into law. sarah palin's bus tour rolled in to historic boston. at bunker hill she fired a shot at romney care for the government mandated participation. in my opinion, any mandate coming from government is not a good thing. it's tough for a lot of us independent americans to accept, because we have great faith in the private sector and our own families. while romney refuses to apologize for the massachusetts healthcare reform he signed he nonetheless promises to undo healthcare reform nationally. >> we're going to return the responsibility and authority to the states for dozens of government programs. that will begin with a complete repeal of obamacare. >> reporter: palin stormed in to new hampshire within hours of romney's announcement insisting she was not there to upstage him. but in addition to her, former new york mayor rudy giuliani visited dover, new hampshire this evening and told granite state insiders he's very serious about running again. former governor john huntsman

kicks off a campaign friday. kicking it off with romney has vacation home. and thaddeus mccotter who is also considering a run will be speaking at that same event. finally, former new york governor george pataki stepped out as the first republican on the air in the first primary state with a tv ad. >> we must do better. join us. you know we can do the right thing. every generation of americans has. >> reporter: now live in seabrook, new hampshire, where behind me, sarah palin is taking part in a backyard clam bake. as she arrived here, she said as going forward she is not necessarily doing so as a candidate but as someone who will add her voice to the conservative message across the country. asked specifically about mitt romney she again said she wasn't trying to steal his thunder and said he would make a "great candidate." >> bret: carl cameron live in seabrook tonight. thank you. former delaware senate candidate o'donnell dom says the federal election

commission dismissed a complaint filed against her in last year's campaign. o'donnell who ran as a republican was accused by the state g.o.p. of violating rules restricting coordination between candidates and outside groups. in this case, the tea party express. new jersey's governor pays for his ride to the ballgame. that's later in the grapevine. but first, president obama's pick for commerce secretary may have to fight to get the job. ♪ yeah

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of everything for you. ♪ [nervous laugh] whoo! so many choices. take your time. the service center. okay. giving you choices. now, that's progressive. call or click today. >> bret: checking world headlines now, nato says it captured a senior al-qaeda operative and former bin laden associate. i happened in northern afghanistan wednesday nato has not revealed his identity. meantime, joints chief chairman admiral mike mullen says general david petraeus has not made his recommendation on troop withdrawal numbers. expected pull-out of some kind is supposed to begin next month. antigovernment activist in

syria say at least 15 people were killed as troops pounded a central town with artillery and gunfire wednesday. the government freed hundreds of political prisoners and called for a dialogue on ending the fighting there. heavy casualties are reported in street fighting in the yemeni capital of sanaa. former army officer who defected said thousands of tribal fighters are trying to break through government lines on the northern outskirts of the city. the defense ministry says the army fought them back. moments ago, reuters reported soldiers are now firing live bullets at protesters tonight in sanaa. nato says it went after military targets in tripoli, libya, early today. moments ago, house speaker john boehner here on capitol hill revealed a resolution critical of the president's handling of u.s. military involvement in libya. house narrowly defeated a separate measure today sponsored by a democrat that would have banned funds from being used in contra vention of the par powers resolution.

president obama's pick to head commerce department has a tough road ahead. republicans are promising to block the nomination of john bryceson. correspondent doug mckelway tells us why. >> today i am pleased to announce i will nominate john bryson to be the nation's next commerce secretary. >> reporter: the commerce secretary nominee bryson most noted for cofounding the natural resources defense council, 1.3 million member nationwide. he's also champion of cap-and-trade policies to reduce carbon emissions. >> it has the advantage politically of hiding the tax, to try to raise the price of carbon. >> reporter: conservative critics say the policy that hi h favors would cause economic hardship. >> they're trying to raise energy prices and lower income families pay higher percent of

their income on energy prices. when you seek to raise energy prices subsidizing renewal technologies you are hurting them more than helping this em. >> reporter: republicans agree. michaedarrell issa says bryso? a green evangelist. enhof called him founder of radical organization. but bryosn faces a bigger agreement. they are threatening to block the nominee. 44 members cosigned the letter. >> if they have 41 members sticking together they can stop the floor from acting on virtually anything in this case, they are focusing on the commerce secretary because it's directly related to the trade tax. >> still, the white house is sticking with bryson. >> he has worked hard in the clean energy sector. since he retired from

medicine. president is very confident that mr. bryson credentials are very strong and recked as such by the senate. >> no confirmation hearings have been schedule and there is no urgency to do so. republicans holding the will and the way. 44 votes to block debate on new mexico nation. doudoughis nomination. doug mckelway, fox news. first, tornadoes make an appearance in deadly impact an unlikely place. [ artis brown ] america is facing some tough challenges right now.

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iranian president mahmoud ahmadinejad has withdrawn as the care-taker of the country oil minister. he has put a political ally in charge. wednesday, parliament voted to

take on the job to court over the takeover of the ministry after he fired the incumbent. secretary of state hillary clinton says the f.b.i. will investigate allegations that china hacked in to google's e-mail system. the company says accounts of several hundred people including senior government officials were exposed. china says it does not support hacking and is working with other nations on security measures. japan's prime minister defeated a no contest motion in parliament. he has been accused of improperly handling the aftermath of the march 11 earthquake and economy economy. he said today he is willing to resign after the recovery firms up. the governor of massachusetts says it is a blessing that there were not more fatalfies from two tornadoes that hit the state wednesday. world molly line shows us the damage from springfield. good evening. >> reporter: good evening. at least two tornadoes set down in central massachusetts

wreaking havoc in neighborhoods. three people were killed many people were caught by surprise. never expecting to see such violent storms here. the image on one twister speaks to the sheer power of the storms that left immense damage and shock in their wake. >> surveying the destruction, families are overwhelmed worried about friends and loved ones. >> family torn up and lost everything. >> massachusetts governor deval patrick declared a state of emergency calling thousands of national guard members to duty. they urged residents to check on the neighbor amidst crumpled homes. >> we have a real mess on our hands here. we are all in this together. for those who are feeling quite understandably that they can't imagine what a better tomorrow looks like, i want to assure them that we are going to do everything to help folks get to that better tomorrow.

we're going to get there together. >> as clean-up gets underway, survivors tell heart-wrenching storying. >> the house was spinning. i have couldn't see anything. everything went black. i couldn't feel the floor under me. i held on to my mom and little brother and held on as tight as i could. >> bright is comforted that the family made it through. the senior senator was stunned. >> 45 years in public service i have never seen this kind of damage or devastation in massachusetts. as many residents said to me. this is massachusetts. this isn't supposed to happen here. it never had to our recollection. >> remarkable damage aside, deadly twisters are exceedingly rare in the bay state. a particularly violent storm in the 1950s claimed more than 90 lives in 1995, three victims were killed along the new york border. senator kerry with the massachusetts congressional

delegation sent a letter to president obama urging him to declare a presidential disaster declaration in the state. state police, fire departments from all over the state, fema and the mema, massachusetts emergency agency are on hand to help aid in the recovery. bret? >> bret: molly, thank you. it is the talk of washington so why did one network newscast ignore it? details next in the grapevine. plus, new jersey's governor responds to criticism. over the use of a state helicopter. [ manager ] you know... i've been looking at the numbers, and i think our campus is spending too much money on printing. i'd like to put you in charge of cutting costs. calm down. i know that it is not your job. what i'm saying... excuse me? alrigh fine. no, you don't have to do it. ok? [ male announcer ] notre dame knows it's better for xerox to control its printing costs. so they can focus on winning on and off the field. [ manager ] are you sure can't talk -- ok, no, i get it. [ male announcer ] with xerox, you're ready for real business.

>> bret: now some fresh pickings from the political grapevine. new jersey republican governor chris christie late today defends his use of a police helicopter to attend his son's baseball game tuesday night and for another perm trip. state police officials say the trip did not cost taxpayer anything extra because the helicopters would have been used for training missions anyway but christie said he will reimburse the state for the use of the chopper. >> if w me writing a check for $2100 and $1200 from the state committee to pay for the two helicopter rides will allow us to focus on the really important issues to the people of the state of new jersey, then i'm willing to do it. you know what my son said to me afterwards? afterwards he said, "dad, thanks for coming."

>> reportercoming." >> bret: the twitter scandal was covered by abc and cbs network newscast. but nbc nightly news failed to mention the story though nbc correspondent luke ressert interviewed weiner earlier in the day. nbc did make time to include controversy over governor christie and the helicopter as well as the retirement of basketball player shaquille o'neal. the "washington post," noticed the significance of the weiner story writing this afternoon, "anthony weiner, we can say with certitude that you had the worst week in washington. congrats or something." finally, former president george w. bush and vice president dick cheney were included a ranking of the five worst people of all-time in an arkansas middle school yearbook. they were in there with adolf hitler, usama bin laden and charles manson. the school superintendent called the list an oversight when parents complained. school officials say they are

not sure who put the list in there and insist the yearbook editing process is now under review. we are going to talk a lot about medicare in the runup to next year's elections. tonight, correspondent william la jeunesse has the bottom line on the issue. >> reporter: we heard 1,000 stories about medicare, but this is the one story you need to see to understand the problem. we're not talking about politics. not republican or democrat. it's about the numbers. medicare is in trouble we're told. in 13 years won't be able to pay its bills. why? because what we pay in to medicare is a fraction of what we take out. >> it's a money in, money out system that is the taxes have come in, basically support the benefit that go out. the benefits are rising faster now than the taxes can support. >> an average male worker retiring this year will pay $55,000 in medicare taxes over his working life. but the cost of his medical

care after retiring is $161,000, $100,000 shortfall. now take a look at 20 years later. the same person pays more in taxes but the cost of care is even higher. now the shortfall is almost $1170,000. >> that means either we'll pay less for services or get less services. on the other side of the equation we'll have fewer providers or we'll pay providers left. >> we are told every taxpayer must pay their fair share. economists say the only americans paying for their medicare earn $250,000. that is just 2% of the population. the rest of us are in hock. in the hole. creating red ink for the medicare trust fund. so what are the political options? well, you can make the middle class pay more. that's not going to happen. cut doctor pay. that didn't work. you could cut senior benefits. that is political suicide. or you can eliminate every other government program, let people die, or ignore the problem and transfer the debt

to our kids. >> well, the bottom line is this. medicare called entitlement. voters see it that way. warning politicians not to cut their medicare. but are you really entitled to something you don't pay for? when 50 to 60% of every medical bill you generate is paid for by somebody else. in los angeles, william la jeunesse, fox news. >> bret: we will take an in-depth look at the issue on a special edition of "special report." the war over medicare. starting friday. 5:00 p.m. eastern time. full hour with representative paul ryan. budget director jack lew and chris van hollen. major player talking specifics. tune in. first lady michelle obama and agriculture department introduced the government new traditional symbol. my plate is set to be simpler than the old food pyramid. circle divided in sections for fruits, vegetables , proteen and grain.

with dairy on the side. mitt romney is officially in. we'll update the 2012 presidential race with the fox all-stars when we return. [ male announcer ] things seem 45% better

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>> bret: bring in your panel. steve hayes, a.b. stoddard and sind kateed columnist charles krauthammer. a.b., mitt romney officially in. not a surprise. his entrance in the official race for the nomination. your thoughts? >> we didn't look like a nominee today. i think he has evolved from 2007 and 2008 but if he wants to be the nominee he has to evolve more. that might be possible in this process. it is a weak field. it remains a weak field. that could change also. but he could have a nice long battle like president obama did his primary battle against hillary clinton. which grows him as a candidate and forces him to become a much better candidate. at this point he has a lot to overcome. flip-flops, healthcare responsibility, second-timer staleness. he has just got a lot of problems.

he has been campaigning in a bunker. we talk about that before. if he comes out and impresses the primary voter in debate, in comparison to other candidates he will start to move to a real lead. i think his lead in the poll is fragile and not real. he needs to build serious momentum. today was not exciting invigorating day for the romney candidacy. >> bret: he refuses to apologize for the massachusetts healthcare, continues to -- hat he signed. but he does promise to undo healthcare reform nationally and says it almost every speech now. is that good enough for conservatives in the party to get him forward? >> well, it's a way to finesse it. i don't think it's terribly log call. it hinges on a kind of esoteric federalism argument. it's okay for state to do it, not nationally, which is too narrow. he has the right theme today

as a candidate. running a reagan-carter campaign, about a referendum about another guy. are you better off today than you were? reagan said that four years ago. it's not easy to make that case today. on election day 2008 we were in financial collapse. the way he is crafting it is to say are you as well off today as obama promised you? or are you as well off today -- he'd be addressing independents -- as you imagine you would be when you took a chance on this guy in 2008? the answer is no. he is running on the economy. not on a theory or the size of government. not running ideological. he said you elected him. i have ran a company, saved the olympics. i was a governor. he is trying to make himself disappear and be the opposite of obama. it's a smart strategy. the only one given his problem

with obamacare. he could adopt. it could work. he will have a hard time, as you said, on that central problem of romney care. >> bret: steve? >> i don't think that's what he was doing in his speech today. he was trying to build a bigger theme. i think you heard it most when he said president obama believes in a different america. after romney got done talking about american history and how proud he was of america and what a great place it was. he said president obama believes in a different america. that is the emerging theme. to fold the jobs and economy message underneath that. that is a team we'll hear from romney and the other candidates. >> bret: palin as i mentioned was in new hampshire as well on the continuing bus tour throughout the northeast. take a listen. >> then also, of course, what my intentions are going forward. it's not necessarily as a candidate or anything. it's as a voice for other

people who want to see america get back on right track. to get our economy rolling again. to allow the private sector grow and prosper and not have government get in the way of the entrepreneurial spirit. >> bret: she also talked about the issue of healthcare. again, on the same day that mitt romney announced in the same state. she said -- >> bret: coincidence she is in new hampshire on this day? >> it is absolutely not a coincidence she is in new hampshire on this day. if you look when she was governor of alaska and then chosen by mccain she challenges every establishment she comes in contact with, but specifically the republican establishment. that is what she was doing

today on healthcare. if you want to know central healthcare will be, sarah palin attacked romney on it today. rudy giuliani attacked romney on it today in new hampshire. michele bachmann attacked tim pawlenty because pawlenty in 2006 said good things about romney carrie. that is how central the issue will be in the campaign. >> bret: a.b.? >> it was also not a coincidence. i was surprised she chose to attack romney on the day he made his announcement but she wants to assert herself and she wants attention and will get it. >> bret: she prefaced it saying he would be a great candidate. >> before she hit his crowning liability as a candidate. it shows the attention she got in new hampshire compared to the attention he got. illustrates she will have a huge influence in the primary. though i don't think she is running.

she wants to be a king maker and troublemaker. >> bret: how about that? if he doesn't run, she is still going to have a lot of influence, charles. >> absolutely. but i think her arrival in the state is a coincidence. i think her driver made a wrong turn on the new jersey turnpike and they accidentally ended up in new hampshire of all places today. i'm not a conspiracy theorist here. look, she obviously is not running. this is -- if she is, it would be one of the most unusual spectacularly original ways to actually run. i think she said, i want to be a presence and i want to be a voice. she could be king-maker. if it comes down to one or two candidates at the end, you could see her endorsement will be sought extremely heavily by whoever is at the top tier. i think she is come notable in that position -- comfortable in that position. we spoke about bachmann earlier who is clearly in the race. i think it's michelle's turn

this time around. and palin will watch this and have influence as she did in the election last november. her say-so was extremely important in a lot of the, a lot of the constituencies. >> bret: we'll have more many more panels on candidates. herman cain, ron paul, gary johnson. >> not slighting us. >> bret: i want to preface that. next up, indiana's fight with the federal government over funding for planned parenthood. do you think the state will have to back down? vote in the online poll foxnews.com/specialreport. results after the break.

the agency involved here will work with indiana and we expect them to come in

compliance. >> medicare can't pay with federal dollars for abortion but it doesn't mean state can deny services from a willing provider. that's what the law is. we're implementing the law. >> it's unfortunate we have presidential administration pushing a pro-abortion agenda, again over the wishes of this particular state legislative branch. >> bret: this is all about public funding for planned parenthood. before break, we asked you will indiana be forced to reverse the ban on public .king for planned parenthood? 14% of you said yes. 86% said no. in this unscientific poll. you heard the medicaid administrator suggesting that warning that the state of indiana would be good enough. the attorney general there has released a statement saying this -- , "we are reviewing the cms letter -- that is the center for medicaid and medicare letter with our client fssa to determine our client's options, but we will continue to defend the statute. i should say that is from the

public information officer for the attorney general in indiana. back with the pam. the battle here is over mitch daniels signing this law passed by the legislature. and whether the federal government can step in and say no you have to abide in this funding. >> look, there is a panel issue here, of course. i agree with the spokesman for indiana who said clearly the administration is trying to push a pro-abortion agenda. however, this issue hinges simply on the interpretation of the law. the law as everybody understands you can't use the funds, medicare funds to pay for the provision of abortion. everybody agrees. the question is if you have an outfit that does two things. say performs abortion a cleans teeth. everybody understands you can't pay for the abortion, but can you subsidize with medicaid money the teeth-clean operation? as i understand the law the way it's interpreted up until now the answer has been yes.

so i think we are a country of laws, this ought to be adjudicated in a court, have indiana sue the medicaid administration over this. see who is right. whatever your views on abortion are, either it's allowed under medicare or not. let's let the judiciary decide. >> bret: a.b.? >> charles is right. i mean the system is either designed to prevent the use of federal funds spent on abortion services or not. if you elect pro-life lawmakers and pass these laws to defund planned parenthood or prevent federal dollars spent on abortion that's understandable. but in a state politically it's going to be, it's a problem. these are federal funds. if the federal government can deny $4 billion in medicaid funding to the state of indiana, i think in their third year of nearly 10% unemployment, that is a lot to

gamble with. to put nearly $4 billion in medicaid funding at risk to that state. so if, you know, so far, all the states have been brought in to compliance who threatened to do something like this. no state has yet been penalized. i don't know where it will play out. politically it's tough. to put that much medicaid funding at risk. >> if the indiana attorney general hasn't laid out his case or response yet, several indiana legislators did in a letter they sent to kathleen sebelius. they laid the argument. it's two parts. medicaid act -- this is who has the authority. in addition to other authority, a state may excuse individual or entity in this case planned parenthood for any reason that the secretary can exclude them from receiving medicaid funds. then a 1991 supreme court case

russ versus solomon giving that authority to the secretary. therefore if the secretary has the authority, the state has authority according to the language in the medicaid act. that is the way the legislators outline the argument the other day to sebelius. expect if indiana challenges chs that that is the way they'll make the argument. >> bret: mitch daniels signed the law and there was talk he might run for president and now he is not running for president. he is not running for governor again. he is term limited there. where is the politics? >> i don't know that there is 2012 politics on this in indiana. but it's very interesting because it seems to me that if the administration is willing to make this case now, on indiana and planned parenthood doesn't it suggest they'll make the case about obamacare down the road? that they are going to choose to require states or other entities to have planned parenthood included the coverage? if that is the case, they get

a huge spike from republicans. >> if the states had a claim on this, hard to understand why 12 of the states who attempted to this caved. and agreed to compromise so the federal funds flow. >> bret: they were worried about the medicare. >> worried about losing the funds. they might lose in court. the interpretation has been up until now the position of the administration. it shows how corrupted the programs with the state and the federal government are. it essentially wipes out the federalism. makes the state the vessel of the federal government because the government is coming in. government is funding you, if washington is funding you it owns you. >> bret: that is it for panel. stay tuned to see what could be another agency lowering standards. [ female announcer ] you've never had

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>> bret: finally tonight, it seems that day after day, some government agency or another has some kind of grim news to report. we all analyze it. well, apparently, we missed one report from an obscure government agency. some people sound pleased with the announcement. >> the federal dating agency drastically readjusted national dating standards to a record low this week. the agency said the major reduction in the minimum basic attributes required in a romantic partner will offset rising levels of desperation to getting the dating sector to get going again. >> if we maintain the current standard there would be too many undatable people in this country. >> the reduction in dating standards has already led many americans to put themselves on the market again. >> now that dead beats and cheaters and abuse of alcoholics are in the federally approved range, options have basically tripled. >> absolutely great. i no longer have to worry about staying in